Lamar plan: Distribute new GM shares to taxpayers

Monday, June 1, 2009 at 11:12pm
Lamar Alexander1.jpg

In the wake of Monday’s bankruptcy filing by General Motors Corp., U.S. Sen. Lamar Alexander has proposed that the nation’s 154 million individual taxpayers be handed shares in the auto manufacturer after it emerges from bankruptcy.

GM’s Chapter 11 filing will make the federal government the company’s largest shareholder with a 60 percent stake. Other owners include a group of the company’s bondholders, the United Auto Workers and the governments of Canada and Ontario.

Detroit-based GM — which yesterday also said it would idle its Spring Hill factory this fall — is expected to emerge from bankruptcy by late this summer. When it does, Alexander told his Senate colleagues, the government should exit its ownership position as soon as possible.

“The best way to help the new GM succeed and recover the taxpayers’ $50 billion in loans may well be simply to give all the government’s stock to the taxpayers and get Washington out of the business of owning and running auto companies — the sooner the better,” Lamar said on the Senate floor late Monday.

In his remarks – which are available here – Tennessee’s senior senator pointed out that GM President and CEO Fritz Henderson told lawmakers Monday morning that unwinding the government’s stake in an orderly way would take longer than the Obama administration has said it wants to take. Giving taxpayers stakes in the company will, he added, create “154 million investor-cheeerleaders.”

“Those shares might not be worth much now, but put them away and one day they might contribute something toward a college education,” Alexander said. “One disadvantage: Giving the stock to taxpayers might well add a few more billion to the federal debt. But whose debt is it anyway? The 154 million taxpayers’. So why not give individual taxpayers the ride up if there is one?”

Click here for more coverage of Monday’s GM events, including the cloudy future of the company’s Spring Hill plant. For a look at some of the many questions arising from the bankruptcy filing, click here.

— Ken Whitehouse contributed to this report

8 Comments on this post:

By: nvestnbna on 6/2/09 at 7:23

GREAT IDEA!!

By: sidneyames on 6/2/09 at 7:55

Yeah right, Lamar. I had GM shares in my port folio. I paid my honest, hard earned money for them. Now they are worth $0. So you want to give me back some of them along with giving the rest of the world who didn't pay for them, some shares. Socialism at it's best.

By: TNReader on 6/2/09 at 8:02

Good idea, but only give the shares to those of us who actually pay income taxes.

To follow up on Sid's comment above, the gov't showed preference to the UAW over the bond holders. Legally the UAW and the bond holders are both unsecured creditors, however the UAW gets much more in this workout than the bond holders do. These are the faceless bond holders, many of whom are retirees who thought they had a safe investment in their retirement portfolio.

By: Blanketnazi2 on 6/2/09 at 8:53

Yeah, sid. My 401k has dropped significantly. I paid honest, hard earned money for it too. I dono't expect to have it paid back. You can't endorse a free market then cry when it doesn't go your way. Please......

By: GoldenGopher on 6/2/09 at 10:12

Sounds like a good way to steer us away from the socialism inherent in the way we're doing things now. Not exactly anything to get excited about. Just a good piece of duct tape to cover the huge dent the current admin put in America's image.

Instead of just giving shares to everyone wholesale, I would suggest a different system. Give every American the option to purchase a set number of shares at a considerable discount and give them 6 months to buy-in.

That way there is a personal contribution from everyone involved. And if not all Americans are participating, it lessens the impact on the other car companies like Ford, who really don't deserve to be pushed out of the market unfairly when every American suddenly thinks they're buying cars from the company they own a part of.

The shares that don't get bought up in the first 6 months can go back through the process until they're sold. But each time only being offered to those who bought in on the last round.

By: Dragon on 6/2/09 at 11:35

Lamar is so, so funny. You can't believe, for a single minute, that the government would give up CONTROL of GM. They only want to control the "high level" decisions, like who will make up the BOD and what cars will be designed/built.

By: TharonChandler on 6/2/09 at 2:15

This reminds me of when him and Bush wanted to 'privatize social security'. Man, they just don't get it and I'm finding the books by Al Franken to be the most honest wisdom (and enjoyable humor) extant. Also see, www.tharonchandler.com

By: Yarddog on 6/2/09 at 2:18

As I listen to Lamar and his fellow Republican Senators rail against the Obama administrations plans to stimulate and make right the economy, I'm reminded of the immortal words of Mark Twain, " In the first place, God made idiots. That was for practice. Then he made US Senators." Lamar, it's easy to criticize but I challenge you to tell the people of Tennessee what you and your cronies would do if you were charged with the task of righting the economy. Tell us or shut your piehole. Dog out